Monthly Archives: September 2008

Bad News Bears

Correction Window: At the beginning of the month it was Crown Berger shares that did a swan dance on some pedestrian financial results and last week it was the turn for Portland cement (EAPC) shares to take a drastic dip in value with the announcement of reduced profits.

This has generally been a tough year for manufacturing stocks and the next few days should see year end results of both Kengen and KPLC who have been battling over tariffs and leaving consumers suffering and manufacturing companies & industries threatening to shut down or decamp owing to high electrical costs.

There are some shares on the NSE that are perceived to be under-valued and some that are over-valued (don’t pay dividends, appreciate on speculation, limited trading activity) – and the announcement of financial results (with the waiver of the 10% daily share price rule) gives the market the chance to correct/adjust share prices. But will these share drop? Do they have any reason to? Their P/E ratios are already so low.

Already Safaricom CEO Michael Joseph has said that the price dip of Safaricom shares have no impact on the company’s performance (their quarterly results will also be tricking in soon)

$10 hotel room

Location: zero star, government owned, grilled crowded room
Facilities: No lights, No shoes or belts allowed, no bathroom, no food
Occupants: depends on the concierge

This ‘hotel’ does not sound like an enticing place to be in Nairobi on a Sunday night, especially when you decide to make a midnight run clad almost in pajamas to a 24-hour Nakumatt store – but that’s what the fabulous Kenya Police decided to offer this local investor in the new 24 hour economy.

After some light grocery shopping, I drove out only to have a policeman with a torch flash me down. I stopped thinking it’s the usual (aimless) check for an insurance sticker on the windscreen, or the officer needing a lift? But no:

Kijana you have driven out of there – yes?
Yes
Did you know you have broken the law?
No I did know that?

The two AK47-totting cops enter the car, one in front seat one in the back and command me to turn round, and proceed back to the store parking which I do. They then ask me demonstrate my driving exit route – and I indicate and proceed into the road (its midnight no other cars on road)

Aha kijana you see, you crossed a double yellow line – you should have turned left and gone to the roundaboutbe fore preceding this way

(This is a weak tale as, this is a narrow road which somehow has four lanes in the daytime, with matatus inventing two of their own, while these cops were asleep, or are too busy to help my friend who was car-jacked a mile away last night. Also the road has not been painted in years, and he claims there’s double yellow line somewhere?)

We drive back to their (nest) vantage point to watch for more ‘offenders’ (prey) – and right on cue, a Toyota Land Cruiser speeds out and takes the same offensive line. This prey looks bigger and more promising than my small car and the front seat cop jumps out of the car before i can fully stop to flash down the SUV – which has a Somali-looking driver (Aha, he’s hit the lottery as; expensive car + Somali driver = $$$, right?)

Meanwhile the other cop jumps into the front seat and orders me to park on the pavement. He removes the car key and asks for my driver license which he then reads as he starts to recite the hotel guest options:

Do you have 5,000 shillings (~$75)? (which is the spot fine/bail he says I will have to pay at the police station so that I may go home and sleep in my bed, failure to which it is on to the cell room with no shoes till I appear in court in the morning)
No
He tells me to call my family and tell them I won’t be home tonight. I sit quietly; I have had a rough day but there’s no point making it worse – this in an obvious shakedown and the less said the better. These guys are out with AK-47’s to make money not to waste time with paperwork at the station. I remain quiet and he says that when his colleague finishes with the Somali/Land Cruiser driver, we will proceed in tandem to the police station/cells. I have called in enough favours today from friends and no point needlessly burdening them at midnight on Sunday. My new best friend continues to initiate conversation:

Do you have that money?
No
Where do you live?
Down the street
Where do you work?
In town
Do you have family?
Yes
How much do you have?
(silence)
Do you have two thousand?
I think I have 1,500
That’s not enough
(silence)
Lete hiyo (bring that)
I upturn my wallet with receipts and change from the super market
I only have 650 (about $10),
That’s not enough, no way (More silence)
Lete hiyo I hand over and he throws the key and license back in my lap.
I’ll let you go because, you also have a family.

And out he gets, to join his colleague at the Land Cruiser. I then start up the car and go home where it all seems like a bad dream 12 hours later. Accepting the ‘hotel offer’ would likely have made a more interesting blog post, but I hope I won’t have to write that one. And all you other 24 hour shoppers should be on the look out for 24 hour predators.

Missing the Kenya Airways Party

I did not attend this year’s Kenya Airways AGM – which is a shame because that was the inspiration for starting this blog. I heard there were the usual questions about buying or leasing planes, goodies for shareholders, loss of shares to Nyaga stockbrokers, perennial candidate making another run for board seats etc… I don’t know why the company shifted from the Bomas of Kenya to Kasarani for meetings but that to me is a step back as Bomas was a perfect setting for the company

anyone who was there is free to add/write in a report – and I hope to attend next year

Trivia from reading the annual report
– Company is very sensitive to changes in the price of world oil – however their fuel costs are hedged 45% to December 2008 and another 25% to March 09
– Now a sky team member with revenue last year of Kshs. 60 billion (almost $1 billion) and carried 2.7 million passengers
– Regional spread – Kenya contributes 9% of revenue (and 11% of profit), Africa 42% (49%), middle east/Asia 20% (19%) and Europe 29% (21%)
– their maintenance facility can change a 777 engine in 3 days and can do all but two checks in-house that mandatorily have to be outsourced
– Capacity/Construction work at JKIA has brought challenges – so the airlines has bought buses to ferry passenger to remote parking have not noticed, and passengers have complained about a shortage of check in counters and departure gates (which may explain some delays)
– Have 330 pilots (61 in training) and will be recruiting more management trainees this year
– Website passed $1m ticket sales mark in December 2007
– Has 74,551 shareholders, but only 29,761 have immobilized their shares